Reliable Baseload Power From the Nation’s Coal Fleet

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Key Takeaway

One of the most important drivers for our country’s economic prosperity is the incredibly reliable electricity grid (a large and complex network of power plants and transmission and distribution lines) that many Americans take for granted. To ensure a reliable electricity grid, utility companies and grid operators must maintain a continuous balance between the amount of electricity generated by coal, natural gas, nuclear, and renewables and the demand for electricity.

Baseload power is essential to maintaining a reliable electricity grid. Baseload power is the minimum amount of electricity needed to serve utility customers, night and day. Baseload power is essential to ensure these customers have a reliable supply of electricity 24/7. Baseload power needs vary from season to season and region to region. For example, northern states often need more baseload power in the winter to heat homes and businesses. Southern states need more baseload power in the summer for air conditioning.

Utilities rely on larger and more efficient sources, especially coal-fueled power plants, to provide baseload power. Coal-fueled power plants operate efficiently and produce large amounts of power at a relatively steady level.

At the same time, coal-fueled power plants are not well suited for up-and-down swings in electricity demand that happen throughout the day. These swings exceed baseload power and are better handled by smaller electric generating units that use natural gas. Thanks to these peaking units, short-term spikes in electricity demand can be met without jeopardizing electric reliability.

Coal-fueled power plants provided 30% of U.S. electricity last year because coal-fueled electricity is very affordable and very reliable. States that rely the most on coal-fueled power plants have electricity prices nearly 30% lower than states that rely less on coal. Also, coal-fueled power plants are highly reliable sources of baseload power. Most people don’t realize the typical coal-fueled power plant stockpiles an 85-day supply of coal at the plant.

Unfortunately, a large number of coal-fueled power plants are shutting down because of regulatory policies and low natural gas prices. So far, one-third of the U.S. coal fleet has either retired or announced plans to retire. Another major source of baseload power ― the nation’s fleet of nuclear power plants ― is also facing retirements, with six nuclear units having retired since 2013 and four more announcing plans to retire by 2021. These coal and nuclear retirements are raising concerns about our ability to maintain a reliable and diverse supply of baseload power.

Natural gas is usually available for power generation, but short-term demand for gas can outstrip supply, for example, during winter when gas is in high demand to heat homes. Natural gas can be in short supply because some parts of the country do not have adequate pipeline infrastructure to transport gas where it is needed. An example of this occurred during the polar vortex of 2014, when extremely cold temperatures and heavy snow led to large increases in power prices and almost caused rolling blackouts. If coal-fueled power plants had been retired at the time, the situation would have been even worse.

While the use of wind and solar to produce electricity is increasing, they are not baseload sources of power because they are not available 24/7. Rather, these are intermittent (not available 24/7) electricity sources because the wind doesn’t blow all the time, and the sun doesn’t always shine. Advances are being made to store electricity from renewable sources for use later, but they are not yet economically competitive with other electricity sources. In the meantime, the U.S. needs a healthy and reliable coal fleet to provide baseload power.

Recently, we wrote a blog showing how PJM relied on its coal fleet during the so-called Bomb Cyclone. Since we wrote the PJM blog, we’ve reviewed similar data from MISO (PDF). These two RTO/ISOs collectively include 127,000 megawatts (MW) of coal-fueled generating capacity, roughly half the nation...